Hubbell Inc. (NYSE:HUBB)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States federal statutory income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State income taxes, net of federal benefit	2.40%	2.50%	3.00%	2.80%	4.50%
Foreign income taxes	-0.20%	-0.50%	-0.10%	-0.70%	-1.10%
Federal R&D Credit	-0.80%	-1.40%	-1.50%	-1.20%	-1.00%
TCJA and related	0.00%	0.00%	0.00%	0.00%	-1.30%
Other, net	-1.10%	-2.40%	-0.90%	-0.20%	-0.50%
Consolidated effective income tax rate	21.30%	19.20%	21.50%	21.70%	21.60%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The consolidated effective income tax rate remained relatively stable between 2018 and 2022, fluctuating within a range of 19.20% to 21.70%. While the United States federal statutory income tax rate remained constant at 21.00% throughout the analyzed period, the final effective rate was influenced by a combination of state taxes, foreign tax credits, and research and development incentives.

State Income Tax Trends: A consistent downward trajectory is observed in state income taxes, net of federal benefit, which declined from 4.50% in 2018 to 2.40% in 2022. This sustained reduction served as a primary variable in moderating the overall tax burden relative to the federal statutory baseline.
Impact of Tax Credits and Foreign Operations: Foreign income taxes and Federal R&D credits provided persistent downward pressure on the effective tax rate. Foreign income taxes functioned as a benefit throughout the period, although the magnitude varied from -1.10% in 2018 to -0.20% in 2022. Similarly, the Federal R&D credit provided a consistent offset, peaking at -1.50% in 2020 before normalizing to -0.80% in 2022.
Analysis of 2021 Variance: The consolidated effective income tax rate reached a period low of 19.20% in 2021. This reduction was primarily driven by a significant increase in "Other, net" adjustments, which reached -2.40% in 2021, the highest reduction recorded in that category over the five-year span.
Non-Recurring Adjustments: Impacts related to the Tax Cuts and Jobs Act (TCJA) were only observed in 2018, where they contributed a 1.30% reduction to the effective tax rate, after which no further TCJA-related adjustments were recorded.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Inventories	9,600)	10,200)	9,600)	10,100)	6,200)
Lease liabilities	27,400)	20,500)	26,000)	24,800)	—)
Income tax credits	22,800)	22,800)	27,800)	26,900)	24,500)
Accrued liabilities	40,800)	38,500)	42,600)	37,800)	35,900)
Pension	38,900)	43,100)	49,600)	53,400)	49,600)
Basis difference in subsidiary	—)	25,100)	—)	—)	—)
Post retirement and post employment benefits	4,500)	4,900)	6,000)	6,000)	6,600)
Stock-based compensation	6,900)	6,700)	7,400)	9,700)	13,100)
Loss carryforwards	14,200)	17,300)	20,500)	21,300)	22,200)
Capitalized research expenditures	18,400)	—)	—)	—)	—)
Miscellaneous other	16,400)	17,000)	16,400)	11,900)	8,800)
Gross deferred tax assets	199,900)	206,100)	205,900)	201,900)	166,900)
Valuation allowance	(32,200)	(32,600)	(34,200)	(29,000)	(21,800)
Deferred tax assets, net of valuation allowance	167,700)	173,500)	171,700)	172,900)	145,100)
Liability on undistributed foreign earnings	(7,000)	(7,900)	(9,600)	(8,600)	(10,900)
Goodwill and intangibles	(185,000)	(205,200)	(218,300)	(212,300)	(206,400)
Right-of-use assets	(26,100)	(19,500)	(25,100)	(24,200)	—)
Property, plant, and equipment	(57,900)	(50,400)	(48,900)	(48,400)	(41,400)
Deferred tax liabilities	(276,000)	(283,000)	(301,900)	(293,500)	(258,700)
Net deferred tax asset (liability)	(108,300)	(109,500)	(130,200)	(120,600)	(113,600)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The net deferred tax position remains a liability throughout the analyzed five-year period, peaking in 2020 at 130.2 million USD before moderating to 108.3 million USD by the end of 2022. This persistent net liability is primarily driven by significant deferred tax obligations related to goodwill and intangible assets, which consistently outweigh the recorded deferred tax assets.

Gross Deferred Tax Assets and Valuation Adjustments: Gross deferred tax assets experienced an upward trajectory from 166.9 million USD in 2018 to a peak of 206.1 million USD in 2021, ending 2022 at 199.9 million USD. A notable decline is observed in loss carryforwards, which decreased steadily from 22.2 million USD in 2018 to 14.2 million USD in 2022, suggesting the utilization of prior losses to offset taxable income. Similarly, assets related to pensions and stock-based compensation showed downward trends over the period. The valuation allowance increased from 21.8 million USD in 2018 to 34.2 million USD in 2020, indicating a more conservative assessment of the realizability of certain tax assets, before stabilizing around 32.2 million USD in 2022.
Deferred Tax Liabilities Analysis: Total deferred tax liabilities peaked in 2020 at 301.9 million USD and decreased to 276.0 million USD by 2022. The most significant component is goodwill and intangibles, which reached 218.3 million USD in 2020 before declining to 185.0 million USD in 2022. Conversely, deferred tax liabilities associated with property, plant, and equipment exhibited a consistent increase, rising from 41.4 million USD in 2018 to 57.9 million USD in 2022, reflecting ongoing capital investments and the timing differences between book and tax depreciation. The introduction of right-of-use assets as a liability component starting in 2019 reflects changes in lease accounting standards.
Net Deferred Tax Position Trends: The net deferred tax liability expanded from 113.6 million USD in 2018 to 130.2 million USD in 2020. However, a reversal trend began in 2021, with the net liability reducing to 108.3 million USD by the end of 2022. This improvement was driven by a reduction in the deferred tax liabilities associated with goodwill and intangibles, which offset the gradual reduction in gross deferred tax assets and the increase in liabilities related to fixed assets.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Non-current tax assets (included in Other long-term assets)	5,500)	5,200)	5,100)	6,200)	6,400)
	Non-current tax liabilities	113,800)	114,700)	135,300)	126,800)	120,000)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial trajectory of non-current tax items from 2018 through 2022 reveals a substantial disparity between deferred tax assets and liabilities, with liabilities consistently maintaining a dominant position on the balance sheet.

Non-current Tax Assets: A general downward trend was observed between 2018 and 2020, with values decreasing from US$ 6.4 million to US$ 5.1 million. This decline was followed by a period of marginal recovery, with the balance rising to US$ 5.2 million in 2021 and US$ 5.5 million by December 31, 2022. Overall, these assets remained relatively stable, fluctuating within a narrow range throughout the five-year period.
Non-current Tax Liabilities: Tax liabilities exhibited an initial growth phase, increasing from US$ 120.0 million in 2018 to a peak of US$ 135.3 million in 2020. This upward trend reversed sharply in 2021, with liabilities falling to US$ 114.7 million, followed by a further slight decrease to US$ 113.8 million by the end of 2022.
Net Deferred Tax Position: The net tax position is characterized by a significant net liability throughout the analyzed timeframe. The divergence between non-current tax assets and liabilities peaked in 2020, coinciding with the highest recorded liability and the lowest recorded asset. While the net liability position narrowed slightly by 2022 compared to the 2020 peak, the liability remains orders of magnitude larger than the corresponding tax assets.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., Financial Data: Reported vs. Adjusted

Hubbell Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Less: Noncurrent deferred tax assets, net	5,500)	5,200)	5,100)	6,200)	6,400)
Total assets (adjusted)	5,397,100)	5,276,300)	5,080,000)	4,896,800)	4,865,700)
Adjustment to Total Liabilities
Total liabilities (as reported)	3,032,000)	3,040,800)	2,999,700)	2,942,500)	3,073,200)
Less: Noncurrent deferred tax liabilities, net	113,800)	114,700)	135,300)	126,800)	120,000)
Total liabilities (adjusted)	2,918,200)	2,926,100)	2,864,400)	2,815,700)	2,953,200)
Adjustment to Total Hubbell Incorporated Shareholders’ Equity
Total Hubbell Incorporated shareholders’ equity (as reported)	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Less: Net deferred tax assets (liabilities)	(108,300)	(109,500)	(130,200)	(120,600)	(113,600)
Total Hubbell Incorporated shareholders’ equity (adjusted)	2,469,200)	2,339,300)	2,200,200)	2,067,700)	1,894,200)
Adjustment to Net Income Attributable To Hubbell Incorporated
Net income attributable to Hubbell Incorporated (as reported)	545,900)	399,500)	351,200)	400,900)	360,200)
Add: Deferred income tax expense (benefit)	(27,800)	9,200)	3,300)	6,100)	49,000)
Net income attributable to Hubbell Incorporated (adjusted)	518,100)	408,700)	354,500)	407,000)	409,200)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

An analysis of the financial adjustments between 2018 and 2022 reveals a consistent pattern resulting from the removal of deferred taxes. This adjustment systematically lowers both total assets and total liabilities, leading to a proportional increase in the adjusted shareholders' equity across the entire five-year period.

Asset and Liability Adjustments: Reported total assets exhibited a steady increase from 4,872,100 thousand USD in 2018 to 5,402,600 thousand USD in 2022. The adjusted asset figures tracked this growth closely, although they remained slightly lower than the reported values in every period. More significantly, reported total liabilities remained relatively stable, fluctuating between 2,942,500 and 3,073,200 thousand USD. The removal of deferred taxes resulted in a substantial and consistent reduction in liabilities; for instance, in 2022, adjusted total liabilities were 2,918,200 thousand USD compared to the reported 3,032,000 thousand USD.
Impact on Shareholders' Equity: A positive correlation is observed between the removal of deferred tax liabilities and the strengthening of the equity position. Adjusted shareholders' equity was consistently higher than reported equity throughout the period. This gap grew from 113,600 thousand USD in 2018 to 108,300 thousand USD in 2022, with adjusted equity rising from 1,894,200 thousand USD to 2,469,200 thousand USD. This indicates that the deferred tax adjustments effectively enhance the net book value of the company.
Net Income Variance: The relationship between reported and adjusted net income is more volatile than the balance sheet trends. From 2018 to 2021, adjusted net income was generally higher than reported net income, suggesting that deferred tax adjustments provided a positive impact on the bottom line during those years. However, 2022 presented a reversal of this trend, where reported net income reached a peak of 545,900 thousand USD, while adjusted net income was lower at 518,100 thousand USD. This indicates that the tax adjustments had a varying impact on annual profitability depending on the specific tax accounting events of each fiscal year.
Overall Financial Trajectory: The overarching trend is one of balance sheet expansion and equity growth. The consistent gap between reported and adjusted liabilities confirms that deferred tax obligations represent a significant portion of the reported liability structure. The removal of these items provides a view of the financial position characterized by higher solvency and increased shareholders' equity.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., Financial Ratios: Reported vs. Adjusted

Hubbell Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	11.03%	9.53%	8.39%	8.73%	8.04%
Adjusted net profit margin	10.47%	9.74%	8.47%	8.87%	9.13%
Total Asset Turnover
Reported total asset turnover	0.92	0.79	0.82	0.94	0.92
Adjusted total asset turnover	0.92	0.79	0.82	0.94	0.92
Financial Leverage
Reported financial leverage	2.29	2.37	2.46	2.52	2.74
Adjusted financial leverage	2.19	2.26	2.31	2.37	2.57
Return on Equity (ROE)
Reported ROE	23.12%	17.92%	16.97%	20.59%	20.23%
Adjusted ROE	20.98%	17.47%	16.11%	19.68%	21.60%
Return on Assets (ROA)
Reported ROA	10.10%	7.56%	6.91%	8.18%	7.39%
Adjusted ROA	9.60%	7.75%	6.98%	8.31%	8.41%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

An analysis of the financial ratios from 2018 to 2022 reveals a general trend of improving profitability and a strategic reduction in financial leverage, with differing impacts observed between reported and adjusted figures resulting from the removal of deferred taxes.

Net Profit Margin: The reported net profit margin shows a consistent upward trend, rising from 8.04% in 2018 to 11.03% in 2022. In contrast, the adjusted net profit margin, which excludes deferred tax effects, began at a higher point of 9.13% in 2018 and increased more modestly to 10.47% by 2022. A crossover occurred between 2020 and 2021, where reported margins began to exceed adjusted margins, indicating a shift in the nature of tax adjustments.
Total Asset Turnover: There is no variance between reported and adjusted total asset turnover ratios across the entire five-year period. Both metrics followed an identical path, peaking at 0.94 in 2019, declining to a low of 0.79 in 2021, and recovering to 0.92 in 2022. This demonstrates that deferred tax adjustments have no impact on the measurement of asset utilization efficiency.
Financial Leverage: A sustained downward trend is observed in financial leverage. Reported leverage decreased from 2.74 in 2018 to 2.29 in 2022, while adjusted leverage decreased from 2.57 to 2.19 over the same period. The reported leverage remained consistently higher than the adjusted leverage throughout the analysis, suggesting that deferred tax liabilities contributed to the overall reported leverage profile.
Return on Equity (ROE) and Return on Assets (ROA): Both ROE and ROA exhibited volatility, with a marked dip in 2020 followed by a strong recovery. Reported ROE grew from 20.23% in 2018 to a peak of 23.12% in 2022, whereas adjusted ROE ended lower at 20.98%. A similar pattern is seen in ROA, where reported figures reached 10.10% in 2022, surpassing the adjusted ROA of 9.60%. The divergence in the final two years suggests that deferred tax accounting began to positively influence reported return metrics relative to the adjusted baseline.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Profitability Ratio
Net profit margin¹	11.03%	9.53%	8.39%	8.73%	8.04%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	518,100)	408,700)	354,500)	407,000)	409,200)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Profitability Ratio
Adjusted net profit margin²	10.47%	9.74%	8.47%	8.87%	9.13%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income attributable to Hubbell Incorporated ÷ Net sales
= 100 × 545,900 ÷ 4,947,900 = 11.03%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Net sales
= 100 × 518,100 ÷ 4,947,900 = 10.47%

Between 2018 and 2022, a general trajectory of growth is observed in both net income and profit margins, despite a temporary contraction during the 2020 fiscal year. The most significant expansion occurred in 2022, where both reported and adjusted metrics reached their five-year peaks.

Net Income Performance: Reported net income attributable to Hubbell Incorporated grew from 360.2 million US dollars in 2018 to 545.9 million US dollars in 2022. A cyclical dip occurred in 2020, with reported income falling to 351.2 million US dollars before recovering strongly over the subsequent two years.
Net Profit Margin Trends: Reported net profit margins demonstrated consistent growth from 2020 onward, rising from 8.39% to 11.03% by 2022. Adjusted net profit margins exhibited a similar recovery pattern, bottoming at 8.47% in 2020 and increasing to 10.47% by the end of the period.
Analysis of Adjusted versus Reported Metrics: A shift in the relationship between reported and adjusted figures is evident. From 2018 through 2021, adjusted net income and adjusted profit margins typically exceeded reported figures, indicating the presence of non-recurring expenses. Conversely, in 2022, reported net income of 545.9 million US dollars surpassed the adjusted figure of 518.1 million US dollars, and the reported profit margin of 11.03% exceeded the adjusted margin of 10.47%, suggesting a transition where reported gains exceeded adjusted results.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Activity Ratio
Total asset turnover¹	0.92	0.79	0.82	0.94	0.92
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Adjusted total assets	5,397,100)	5,276,300)	5,080,000)	4,896,800)	4,865,700)
Activity Ratio
Adjusted total asset turnover²	0.92	0.79	0.82	0.94	0.92

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 4,947,900 ÷ 5,402,600 = 0.92

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 4,947,900 ÷ 5,397,100 = 0.92

A consistent expansion of the asset base is evident from 2018 through 2022. Reported total assets grew from 4,872,100 thousand US dollars to 5,402,600 thousand US dollars, representing a steady upward trajectory in the company's resource deployment over the five-year period.

Asset Base Stability: A minimal variance is observed between reported and adjusted total assets across all periods. For instance, in 2022, the difference between reported total assets of 5,402,600 thousand US dollars and adjusted total assets of 5,397,100 thousand US dollars indicates that adjustments had a negligible impact on the overall asset valuation.
Asset Turnover Volatility: The adjusted total asset turnover ratio exhibited a fluctuating pattern. After a slight increase from 0.92 in 2018 to 0.94 in 2019, the ratio experienced a notable decline, dropping to 0.82 in 2020 and reaching a low of 0.79 in 2021. This downward trend suggests a period of reduced asset efficiency in generating revenue. However, a significant recovery occurred in 2022, with the ratio returning to 0.92.
Comparative Analysis of Reported vs. Adjusted Metrics: There is a perfect correlation between the reported total asset turnover and the adjusted total asset turnover. Both metrics remained identical for every year in the sequence, confirming that the adjustments applied to the total assets did not materially alter the resulting turnover ratios.

The overall trend indicates that while the company increased its asset holdings steadily, the efficiency of those assets declined mid-period before returning to 2018 levels by the end of 2022.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Total Hubbell Incorporated shareholders’ equity	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Solvency Ratio
Financial leverage¹	2.29	2.37	2.46	2.52	2.74
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	5,397,100)	5,276,300)	5,080,000)	4,896,800)	4,865,700)
Adjusted total Hubbell Incorporated shareholders’ equity	2,469,200)	2,339,300)	2,200,200)	2,067,700)	1,894,200)
Solvency Ratio
Adjusted financial leverage²	2.19	2.26	2.31	2.37	2.57

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total Hubbell Incorporated shareholders’ equity
= 5,402,600 ÷ 2,360,900 = 2.29

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Hubbell Incorporated shareholders’ equity
= 5,397,100 ÷ 2,469,200 = 2.19

An analysis of the financial position from 2018 to 2022 reveals a consistent trend of asset growth and equity strengthening, which has resulted in a steady reduction of financial leverage. The company demonstrates a disciplined approach to capital structure, as evidenced by the simultaneous increase in total assets and shareholders' equity over the five-year period.

Asset Growth Trends: Reported total assets increased steadily from 4,872,100 thousand USD in 2018 to 5,402,600 thousand USD in 2022. Adjusted total assets followed a nearly identical trajectory, starting at 4,865,700 thousand USD and reaching 5,397,100 thousand USD by the end of the period. The minimal variance between reported and adjusted assets suggests that the adjustments made to the asset base are marginal.
Shareholders' Equity Expansion: A significant upward trend is observed in shareholders' equity. Reported equity grew from 1,780,600 thousand USD in 2018 to 2,360,900 thousand USD in 2022. Notably, adjusted shareholders' equity remained consistently higher than reported equity throughout the period, ending at 2,469,200 thousand USD in 2022. This indicates that the adjustments applied to the equity accounts provide a more favorable view of the company's net worth.
Financial Leverage Reduction: Both reported and adjusted financial leverage ratios exhibited a consistent decline. Reported leverage decreased from 2.74 in 2018 to 2.29 in 2022. Adjusted financial leverage followed a similar downward path, decreasing from 2.57 to 2.19. This trend reflects a reduction in the proportion of debt relative to equity, indicating a decrease in financial risk over the analyzed timeframe.
Impact of Adjustments on Leverage: The adjusted financial leverage ratio is consistently lower than the reported ratio in every year of the analysis. This variance is primarily driven by the higher values in adjusted shareholders' equity relative to reported equity. The gap between reported and adjusted leverage narrowed slightly over time, moving from a difference of 0.17 in 2018 to 0.10 in 2022, suggesting a gradual convergence in the impact of these adjustments.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Total Hubbell Incorporated shareholders’ equity	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Profitability Ratio
ROE¹	23.12%	17.92%	16.97%	20.59%	20.23%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	518,100)	408,700)	354,500)	407,000)	409,200)
Adjusted total Hubbell Incorporated shareholders’ equity	2,469,200)	2,339,300)	2,200,200)	2,067,700)	1,894,200)
Profitability Ratio
Adjusted ROE²	20.98%	17.47%	16.11%	19.68%	21.60%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income attributable to Hubbell Incorporated ÷ Total Hubbell Incorporated shareholders’ equity
= 100 × 545,900 ÷ 2,360,900 = 23.12%

² Adjusted ROE = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Adjusted total Hubbell Incorporated shareholders’ equity
= 100 × 518,100 ÷ 2,469,200 = 20.98%

The financial performance from 2018 to 2022 demonstrates a cyclical trend in profitability relative to equity, characterized by a mid-period contraction followed by a significant recovery in the final year of the period.

Net Income Trends: Reported net income exhibited volatility, reaching a peak of 545.9 million US$ in 2022 after a decline to 351.2 million US$ in 2020. Adjusted net income followed a similar trajectory, although it finished lower than the reported figure in 2022 at 518.1 million US$, indicating that certain non-recurring items or tax adjustments positively impacted reported results relative to adjusted results in the final year.
Shareholders' Equity Growth: A consistent upward trend is observed in both reported and adjusted shareholders' equity. Reported equity increased from 1.78 billion US$ in 2018 to 2.36 billion US$ in 2022. Adjusted equity followed an identical growth pattern, rising from 1.89 billion US$ to 2.47 billion US$ over the same timeframe.
Return on Equity (ROE) Analysis: Reported ROE reached a five-year high of 23.12% in 2022, rebounding from a period low of 16.97% in 2020. Adjusted ROE mirrored this U-shaped pattern, declining from 21.60% in 2018 to 16.11% in 2020 before recovering to 20.98% by the end of 2022.
Comparative Divergence: A shift in the relationship between reported and adjusted ROE is evident. In 2018, adjusted ROE exceeded reported ROE by 1.37 percentage points. By 2022, this relationship inverted, with reported ROE exceeding adjusted ROE by 2.14 percentage points, suggesting a change in the nature of the adjustments applied to net income and equity.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Profitability Ratio
ROA¹	10.10%	7.56%	6.91%	8.18%	7.39%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	518,100)	408,700)	354,500)	407,000)	409,200)
Adjusted total assets	5,397,100)	5,276,300)	5,080,000)	4,896,800)	4,865,700)
Profitability Ratio
Adjusted ROA²	9.60%	7.75%	6.98%	8.31%	8.41%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income attributable to Hubbell Incorporated ÷ Total assets
= 100 × 545,900 ÷ 5,402,600 = 10.10%

² Adjusted ROA = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Adjusted total assets
= 100 × 518,100 ÷ 5,397,100 = 9.60%

The financial performance from 2018 through 2022 demonstrates a general expansion in profitability and asset utilization, characterized by a period of volatility followed by significant acceleration in the final year.

Net Income Trends: Reported net income exhibited an overall upward trajectory, rising from 360.2 million USD in 2018 to 545.9 million USD in 2022, despite a contraction to 351.2 million USD in 2020. Adjusted net income followed a similar pattern, peaking at 518.1 million USD in 2022. A notable shift occurred in 2022, where reported net income exceeded adjusted net income, diverging from the trend observed between 2018 and 2021 where adjusted figures were consistently higher.
Asset Base Growth: Total assets showed a consistent and steady increase over the five-year period. Reported total assets grew from 4.87 billion USD in 2018 to 5.40 billion USD in 2022. The variance between reported and adjusted total assets remained marginal throughout the period, indicating that balance sheet adjustments had a minimal effect on the overall scale of the asset base.
Adjusted and Reported ROA Performance: The return on assets (ROA) for both reported and adjusted metrics mirrored the fluctuations in net income, with a synchronized decline in 2020 to 6.91% and 6.98%, respectively. A sharp recovery is observed in 2022, with reported ROA reaching a period peak of 10.10% and adjusted ROA reaching 9.60%. The transition in 2022, where reported ROA surpassed adjusted ROA, aligns with the trend seen in net income, suggesting a period of high operational efficiency and a reduction in the negative impact of non-recurring items.

AI Ask an analyst for more